Job Support Scheme (JSS) Updated 22-10-20
The Job Retention Scheme (JRS) will close on 31 October 2020. The Job Support Scheme (JSS) will replace the JRS. The Chancellor has now updated the JSS again.
Full details can be found using this link;
What is the Job Support Scheme - JSS?
The Job Support Scheme for Open Businesses, is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19, to help keep their employees attached to the workforce.
The business will continue to pay its employee for time worked, but the burden of hours not worked will be split between
the employer and
the Government (through wage support) and
the employee (through a wage reduction),
To enable the employee to keep their job.
The scheme will open on 1 November 2020 and run for 6 months, until April 2021.
Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.
What has Changed?
The announcement on 22 Oct reduces the employer contribution to unworked hours to just 5%, and reduces the minimum working hours requirements to 20%, so those working just one day a week will be eligible.
That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules).
A full-time employee in the hospitality industry is paid an average of £1,100 per month.
Under the Jobs Support Scheme for open businesses, the employee will still receive £807 gross a month. (See calculations below --- £220 + £543 + £44)
The Employer's position is;
Normal pay for 20% working hours - £1,100 x 20% = £220
(leaving £880 for unworked hours ---- £1100 - £220)
Government will pay the employer £543 (£880 x 61.67%)
Employer pays a further £44 (£880 x 5%)
Total cost to the Employer £264 (£220 + £44) for 20% hours worked.
The Employer will also have to pay any Employers NIC & Employers Pension contributions that may be due.
Extension of the Job Support Scheme (JSS)
This extended support will be available to businesses across the UK that are required to close their premises due to coronavirus restrictions.
Businesses required to close as a result of specific workplace outbreaks by local public health authorities are not eligible to claim under this extended JSS scheme.
Employers will only be able to use the scheme for employees who cannot work (paid or unpaid) for that employer.
What are the additional benefits offered?
- Government will pay two-thirds of employees’ monthly salaries up to a maximum £2,100 per month, per employee.
- Employers will not be required to contribute to wages and will only have to pay any National Insurance and pension costs.
- The scheme will only apply to businesses required to close due to coronavirus restrictions. It will include premises restricted to delivery or collection only services from their premises.
- To claim, employees must be off work for a minimum seven consecutive days.
When will the additional JSS payment be made?
As with the wider JSS scheme, claims for November will be processed in December via an online portal. Subsequent months’ claims will thus be paid one month in arrears.
Self-Employment Income Support Scheme Grant Extension
The Self-Employment Income Support Scheme Grant Extension provides support to the self-employed in the form of two grants, each available for three month periods covering
- November 2020 to January 2021 – 40% of average trading profits, capped at £3,750
- February 2021 to April 2021 – Level to be determined
Who can claim
To be eligible for the Grant Extension self-employed individuals, including members of partnerships, must:
- have been previously eligible for the Self-Employment Income Support Scheme first and second grant (although they do not have to have claimed the previous grants)
- declare that they intend to continue to trade and either:
- are currently actively trading but are impacted by reduced demand due to coronavirus
- were previously trading but are temporarily unable to do so due to coronavirusWhat the Grant Extension coversThe Government will provide a taxable grant covering 40% of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped at £3,750 in total.The grants are taxable income and also subject to National Insurance contributions.HMRC will provide full details about claiming and applications in guidance on GOV.UK in due course.Cash Grants for business required to close in EnglandCash grants to businesses required to close in England are also being increased. These cash grants are to support business owners with fixed costs; those costs payable even if the business is closed.
- Grants will be linked to rateable values of business premises and will paid every two weeks. This should provide extra financial support to businesses across the hospitality sector that are required to close due to COVID restrictions.
- How to claim
- The second grant will cover a three-month period from 1 February 2021 until 30 April 2021. The Government will review the level of the second grant and set this in due course.
- The extension will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period.
- Smaller businesses with rateable values at or below £15,000 will be able to claim £1,300 per month.
- Medium-sized businesses with a rateable value between £15,000 and £51,000 will be able to claim £2,000 per month, and
- Larger businesses will be able to claim £3,000 per month.
The devolved administrations in Scotland, Wales and Northern Ireland will be receiving additional financial support to offer similar measures in the devolved areas, should they choose to do so.
Local Restrictions Support Grant - Tier 2
What is the scheme?
We are providing additional funding to allow local authorities to support businesses in Tier 2 areas which are not legally closed, but which are severely impacted by the restrictions on socialising.
The funding local authorities will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area, and will assume that these businesses receive grants equivalent to 70% of the grants for which legally closed businesses are eligible.
This would be equivalent to:
- For properties with an RV of £15k or under, grants of £934 per month
- For properties with an RV of between £15k-£51k, grants of £1,400 per month
- For properties with an RV of £51k, grants of £2,100 per month
It will be up to Local Authorities to determine what precise funding to allocate to each business – the above levels are only an approximate guide.
Local authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which may not be in the business rates system. This scheme will initially run until April, with a review point in January.
Who is eligible?
Local authorities have the freedom to determine the precise eligibility criteria for these grants in their local areas.
The guiding principle for local authorities is to use the funding to support businesses which have not been legally required to close, but which are nonetheless severely impacted by reduced demand caused by Tier 2 restrictions on socialising.
How can businesses access the grants? Grants will be administered by Local Authorities, and businesses are likely to need to apply to their local authority for support. It is up to local authorities to determine the payment schedule and timings for these grants.
What can businesses use the grants for?
Businesses can choose to spend the grants as they wish. We expect that many businesses will use the grants to cover high fixed property-related costs.
What about areas which have been living under Tier 2-equivalent restrictions for several months already? Will you help them?
Some areas have been subject to restrictions on socialising for several months, before the tiering system was introduced. Funding for these areas will be backdated until the point at which these restrictions began.